Cavendish's Polypipe targets £400m valuation in planned IPO

Ellie Pullen
19 March 2014

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UK plastic piping manufacturer Polypipe, owned by Cavendish Square Partners, has announced plans to list 50% of its stock on the London Stock Exchange.

The offering is composed entirely of existing shares, including those currently held by Cavendish, Polypipe's principal shareholder.

Cavendish will also consider parting with additional shares for an overallotment option.

Polypipe is reportedly hoping to garner a market cap of £400m, which would mean gross proceeds of around £200m from the IPO for the company's shareholders. Alongside Cavendish, Polypipe's executive directors and other employee shareholders are expected to sell stock in the offering.

Deutsche Bank and Numis Securities have been appointed as joint bookrunners and joint sponsors for the IPO, while Canaccord Genuity is acting as co-lead manager and Moelis has been appointed as financial adviser to Polypipe.

Cavendish took control of Polypipe in July 2010, when the venture was formed to acquire the portfolio of Lloyds Banking Group's private equity division following the bank's rescue of HBOS. Coller Capital acquired a 70% stake in Cavendish for £332m, with Lloyds retaining the remaining 30% shareholding. Caird Capital manages Cavendish.

Bank of Scotland acquired Polypipe in August 2007 from US private equity house Castle Harlan, which had backed the company in 2005 via its Castle Harlan Partners III fund for £293m, according to unquote" data.

Founded in 1980, Polypipe is headquartered in Doncaster with 16 facilities in the UK, France, Italy and Dubai. The company first listed on the stock exchange in 1986 before becoming private again in 1999. In 2005, the business executed a management buyout with Castle Harlan.

Polypipe manufactures plastic piping systems for the residential, commercial and civil infrastructure industries.

The company recorded revenues of £300.8m in 2013, as well as an adjusted EBITDA of £54m with a margin of 18%. Polypipe employs 2,017 staff. David Hall is its CEO.